Unlike plastics and most other metals, Gold is easy to work with (i.e. non-brittle, low melting point, easy to mold/cast, it is conductive so its easy to plate other metals) and it is non-corrosive. Therefore, gold jewelry is historically a finer end product that can be made with less skill and the result lasts longer.
To a lesser degree of importance for jewelry, but still a prized property for wearable items, gold is antibacterial and anti-fungal.
Sure people may collectively decide the market price of gold, but people never collectively decided the properties of gold were valuable, those properties are inherently valued by people and Gold happens to have them.
Silver has these same qualities, hence why both Silver and Gold are historically used for jewelry in the first place. People didn't start making jewelry out of Gold and Silver because Gold and Silver was "valuable", rather Gold and Silver were used to make jewelry because of their ideal properties for jewelry, and its the properties of these metals that make gold/silver valuable.
So when I can get a big fat gold ring for a quarter next to the bubble gum machines at the gas station, you think it will still be good for an engagement or to commemorate 25 years of service because it is so very non-brittle, conductive and easy to melt, mold and cast?
It would still probably be used for inexpensive jewellery but maybe not things where showing investment was important. That said with engagement rings most of the cost is the diamond not the gold. Also it will remain in limited supply unless we start mining asteroids.
Yes, people will still purchase the $.25 gold ring over the $.25 plastic ring. Do you ever look at two identically priced items and purposely purchase the one of lower quality?
